- Published on
US senators urge CFTC probe Polymarket over ‘deceptive marketing’
- Authors
- Name
- DeepHorus
Bipartisan US senators John Curtis and Adam Schiff have called on the Commodity Futures Trading Commission (CFTC) to investigate the prediction market platform Polymarket over alleged deceptive marketing. In a letter sent to CFTC Chair Mike Selig on Thursday, the senators expressed concern that Polymarket “used deceptive marketing tactics to promote gambling-style products to US audiences.” The lawmakers urged the agency to scrutinize the platform, citing a “troubling” report on its advertising practices.
The request follows a Wall Street Journal report on June 20 revealing that Polymarket paid social media influencers to film fake trades on websites resembling its platform. The Journal stated that many creators did not disclose that Polymarket compensated them, potentially misleading viewers. In response, a Polymarket spokesperson told Cointelegraph earlier this week that the company was “conducting a comprehensive audit of active promotional content to ensure it complies with our standards, as well as applicable regulatory and legal disclosure requirements.”
The Journal reviewed over 1,100 videos and found that 70% featured fake bets amounting to nearly $2 million. Additionally, reports from the Journal and CNBC on Friday indicated that the CFTC is already investigating Polymarket. CNBC reported, citing a person familiar with the inquiry, that the CFTC has an ongoing and extensive investigation into the platform, though the timeline for when it began was not disclosed. Polymarket declined to comment on the letter or the reported CFTC investigation.
Prediction markets have recently exploded in popularity, seeing billions of dollars in volume each month, which has raised regulatory concerns. Senators Curtis and Schiff questioned the CFTC’s ability to enforce laws on these platforms, noting that “content creators routinely portray prediction markets as ‘free money,’” leaving little basis to treat them differently from gambling. They argued that “these contracts are not in the public interest and should not be treated as derivative products with hedging value.”
The CFTC has repeatedly asserted regulatory authority over prediction markets, as these platforms are registered with the agency and operate under federal commodities law. The regulator has sued nine US states that filed legal action against prediction markets, accusing the platforms of offering unlicensed sports betting via event contracts. The senators expressed concern that the Commission is “neither enforcing the law appropriately, nor is equipped to serve as a federal gambling regulator.”
Senators Curtis and Schiff requested written responses from Chair Selig by July 10 to a list of questions, including whether the CFTC is investigating Polymarket, whether the reported advertising is legal, and whether the agency has sufficient resources to police prediction markets. The outcome of this probe could set a significant precedent for how prediction markets are regulated in the United States, potentially impacting similar platforms and their marketing practices. The CFTC has not yet publicly responded to the senators’ letter.
